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With more than $5.7 trillion in assets under management, BlackRock, Inc. (NYSE: BLK ) is the largest investment manager in the world. And while most of that is held and managed for institutional clients, BLK does have a stable of mutual funds, exchange-traded funds (ETFs) and closed-end funds (CEFs) available to investors of all stripes.
And it turns out, most of these funds are actually pretty darn good when it comes to returns, values and expenses. BlackRock funds have to be on your list.
But with hundreds of BlackRock funds to pick from, choosing just the right one can be a daunting task. BLK literally has a fund covering every sector, asset class and strategy you could ever want.
Luckily, here at InvestorPlace , we've done some of the leg work for you. Here are three great BlackRock funds that every investor should own.
Great BlackRock Funds to Buy: BlackRock Global Allocation Fund (MDLOX)
It takes a deft hand to navigate a constantly shifting global economy. You have to know what to hold and where to hold it, in order to take advantage of all the opportunities across the planet. With a huge team of seasoned investment professionals, the BlackRock Global Allocation Fund (MUTF: MDLOX ) is such a fund.
MDLOX is a $39 billion behemoth that is surprisingly agile for its size. The fund and its team of over 50 investment professionals is allowed to invest in pretty much anything, anywhere. That includes stocks and bonds from both emerging and developed markets, cash and even commodity investments.
What's more, the BlackRock fund can shift these as the winds of the global economy change course. Right now, that has it about 60% equities, 35% fixed income and 5% in commodity futures. The overall idea of MDLOX is to deliver a higher rate of return of global stocks with lower volatility over a full market cycle.
The fund has been able to deliver on that promise since its inception in 1990s.
Since launching, MDLOX has averaged a whopping 9.68% per year in total returns. That's enough to earn it a coveted silver rating from Morningstar.
With the ability to buy MDLOX free of sales loads at many brokerage houses these days and a low 1.08% expense ratio, or $108 per $10,000 invested, the BlackRock fund makes a great core holding
Great BlackRock Funds to Buy: BlackRock Multi-Sector Income Trust (BIT)
For those investors looking for strictly income, the BlackRock Multi-Sector Income Trust (NYSE: BIT ) makes an ideal closed-end fund (CEF) to buy- especially considering its high dividend yield of 7.58%.
As a multisector or go-anywhere bond CEF , BIT's managers have the ability to look pretty much anywhere for income opportunities. That can include asset-backed securities, bank loans, treasury bonds, corporate bonds and even emerging-market debt. And the fund does make use of all of these fixed income types - spreading its $765 million in assets over 1,274 different bonds. However, much of its portfolio - about 57% - is currently in junk bonds and asset-backed securities.
That multi-bond-style portfolio has benefited the fund in terms of performance in addition to providing a high income. BlackRock's mangers at BIT have a done a good job at growing the CEF's underlying NAV and the fund has had decent total returns when looking at its market price. That strong performance has helped it score a three-star rating from Morningstar .
Perhaps the best part about BIT is that investors can buy it at over a 7% discount to that NAV.
At the end of the day, BIT makes an ideal core income option for investors looking to get their feet wet in CEFs.
Great BlackRock Funds to Buy: iShares Core S&P 500 ETF (IVV)
The crown jewel in BlackRock's fund empire is its successful iShares line of exchanged traded funds (ETFs). BlackRock purchased the division from struggling Barclay's for a song and managed to turn it into the largest ETF operator in the world. And where iShares shines is cheap, broad indexing.
And that makes the iShares S&P 500 Index (ETF) (NYSEARCA: IVV ) one of the best choices for investors.
The IVV tracks the bread-n-butter S&P 500 , so investors are getting exposure to companies like Apple Inc. (NASDAQ: AAPL ) and Johnson & Johnson (NYSE: JNJ ). But what separates IVV from any rivals is that it's basically free to own. The BlackRock fund charges 0.04%, or just $4 per $10,000 invested, to own it. That's insanely cheap.
And it's also important as costs are one of the major hurdles to returns. High expenses come directly out of your bottom line, and that leads to less money for compounding and overall long term returns. When it comes to indexing, lower is always better. And for IVV, that's about as low as you can go.
For investors looking to build their core portfolio IVV makes one of the best additions you buy for large-cap stock exposure.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.
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